Emerging Europe

Emerging Europe Data Response

Poland Activity Data (Sep.)

The latest activity data suggest that Poland’s economy ended Q3 with solid momentum, and GDP is likely to have risen by 1.6% q/q (4.7% y/y) in Q3 as a whole. But with the re-opening boost fading and supply issues likely to take a bigger toll on industry, we think that growth will slow further in Q4.

21 October 2021

Emerging Europe Economic Outlook

Near-term recovery to face stronger headwinds

The region has experienced a rapid recovery, but the re-opening boost has now faded and the region is likely to face stronger headwinds in the near term due to surging COVID-19 cases, rising inflation and supply disruptions. Central European economies are vulnerable to shortages of key production inputs in the auto sector and low vaccine coverage countries such as Russia, Romania and Ukraine look most at risk of imposing tighter containment measures. Inflation is likely to remain stubbornly high over the coming months and central banks are likely to continue their front-loaded tightening cycles well into next year.

20 October 2021

Emerging Europe Economics Update

Baltic States brush off pandemic’s economic hit

GDP in the Baltic States has already surpassed pre-pandemic levels and we expect this strength to be sustained, with growth outpacing Central Europe and the euro-zone as a whole over the coming years. This strong recovery will use up spare capacity fairly quickly and fuel higher inflation. The main risk is that these economies overheat, causing macro imbalances to build.

18 October 2021

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Emerging Europe Data Response

Poland Activity Data (Sep.)

Our view

Economies across Emerging Europe enjoyed a rapid rebound in Q2, but the recovery has come off the boil in Q3 and growth is likely to slow further in Q4. The re-opening boost to services sectors has faded and supply chain disruptions and raw materials shortages are now taking a greater toll on industry. Auto sectors in Central Europe are likely to struggle over the coming months. Meanwhile inflation will rise further above central banks’ targets and interest rates are likely to rise sharply in most countries – Turkey is an exception, where aggressive easing lies in store over the coming months.